Government moves to quell fears over school funding formula reforms


Ministers have reassured headteachers this week over the future of their budgets, amid fears that plans to simplify the national funding formula could lead to huge shortfalls and school closures.

Widespread concern about the changes caused the Department for Education to write to schools earlier this month to confirm that a Minimum Funding Guarantee (MFG) would be in place until at least 2015.

This will mean that no school will lose more than 1.5 per cent of its total budget in the next and subsequent financial years as the new funding mechanisms are implemented.

After 2015, there will be further safeguards, the government says, although actual figures will not be released until the next Comprehensive Spending Review in three years’ time.

A spokesman for the Department for Education said it had always intended to safeguard school budgets while the national funding formula changed. He said that some local authorities and schools had not been aware of the existence or extent of the MFG.

He continued: “Although we cannot give an exact figure for the Minimum Funding Guarantee in future years until after the next spending review, ministers are clear that it will continue to operate, in order to offer protection against unmanageable falls in school budgets. This will help us to make steady progress towards the goal of a consistent national formula.”

The move follows representations from local authorities, including Staffordshire County Council and other members of the F40 group of lowest-funded councils, to David Laws, the minister for schools. He has pledged to review the arrangements next year to assess the impact the reforms will have on schools.

Under the funding formula changes, local authorities are required to pay each school a lump sum of equal value regardless of their pupil numbers, intake or other factors, and the list of 37 criteria formerly used to allocate further funding to schools has been cut to just 12. It means that some schools will benefit financially while others will lose out.

Local authorities are required to submit their funding formulae to the government’s Education Funding Agency by the end of this month.

In Cumbria, some schools faced losing up to 30 per cent of their budgets under the proposals, and the prospect of closure. In Worcestershire, meanwhile, the changes caused protests by headteachers of rural schools, who said they would be disproportionately affected. In future, being a rural school will no longer attract any additional funding.

Malcolm Trobe, deputy general secretary for policy at the Association of School and College Leaders, said the problem had been exacerbated by the government making funding changes in the wrong order.

“If they had reformed the central government to local authority funding formulas in the first instance, instead of starting with how schools are funded by local councils, then some of these issues might have been ironed out sooner because councils would have known how much money was available.

“What ministers have tried to do is to create a more equitable funding mechanism for schools but it is now over-simplified with the result that it is still not meeting the needs of schools. This is a huge concern to many of our members, particularly in areas which have historically received less funding.”

Ian Parry, Staffordshire County Council’s cabinet member for finance, education and skills, said concerns remained over the long-term effect of a reduction in school funding, despite ministerial assurances.

He said: “I urge the key decision-makers to look at the bigger picture. These (funding) reforms do not take into account the diverse school landscape we have, and do not stop the fact that some schools will enjoy big increases to their budgets at the expense of others.

“We have agreed all along that school funding needs to be fair and we are working with our schools to ensure they get the best out of this. We will be doing everything we can to avoid a financial crisis in our schools.”

For more information on the new school funding arrangements and to download the document School funding reform: Arrangements for 2013-14


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